Top Tips To Help Find The Best Guarantor Loans
Can You Get Guarantor Loans Without Being A Homeowner?
Guarantor loans are a good way to borrow money if you have a limited work history and no assets. You can get a guarantor to co-sign the loan and help you qualify for a loan if they have sufficient assets.
Getting a guarantor loan is a lot easier if you or your guarantor own a home. A house or an apartment is often considered as a valuable asset and banks will be far more likely to approve your loan or to let you borrow more cash if you or your guarantor own a home.
Do Not Be Deterred If You Are Not a Homeowner
However, not owning a home shouldn't deter you from applying for a guarantor loan. You can qualify for one of these loans even if your guarantor isn't a homeowner. Keep in mind that there are other requirements the bank will want you and your guarantor to meet.
The downside of applying for a guarantor loan if you and your guarantor aren't homeowners is that you might only be able to borrow a relatively small sum of money. The amount of the loan you can qualify for will depend on a few factors but qualifying for a larger loan is usually a lot easier if there is a home that can be used as an asset on the loan application.
Applying For Unsecured Loans
Applying for a loan without an asset like a house or an apartment means that you are applying for an unsecured personal loan. The fees and interests are typically higher for these loans compared to loans that can be secured with an asset.
The bank or financial institution you want to borrow money from will probably want you and your guarantor to meet a few requirements. They will probably want to see some recent paychecks and get a letter from your current employer that stays you are not at risk of losing your job. Banks and financial institution might also do a credit check and want more details about your work history.
You will be able to obtain a guarantor loan even if you do not own a home as long as the bank or lender feels that you are earning enough money to easily afford your loan payments. If your income is somewhat limited, they will want to make sure that your guarantor will be able to easily afford the loan payments in case you default on your loan.
Finding Out Essential Loan Requirements
You can easily obtain a guarantor loan by finding out about the income requirements in advance and by gathering all the documents you need to prove your income. You also need to get some documents that prove your guarantor is earning enough money to easily make the loan payments as well. You will be more likely to obtain a guarantor loan if you apply for a small amount.
You should keep in mind that applying for a guarantor loan without being able to use a home as an asset means you will be applying for an unsecured loan and that fees and interests will be higher. Compare your options and look for a bank or lender with affordable fees.
If you feel your options are limited and you need further advice to stop you going down the ‘payday loan’ route, check out the following link for more information - https://www.moneyadviceservice.org.uk/en/articles/payday-loans-what-you-need-to-know
Top Tip - Ever wondered what the difference between secured and unsecured loans is? The following video may help to fill in a few of the blanks.